PHILIPPINE billionaire Manuel Villar, who made a fortune building affordable homes, is considering merging his residential and shopping mall units as he turns housing projects across the country into self-contained communities.

Combining Vista Land &Lifescapes, Inc., the biggest Philippine homebuilder, with the income stream from shopping-center developer Starmalls, Inc."could make sense," according to Mr. Villar, a former politician who’s chairman of both companies. The two have a combined market value of about $2.5 billion and the stakes held by the tycoon and his family are worth together more than $1 billion, according to data compiled by Bloomberg.

"That is always a topic of debate among our officers and among our bankers," Mr. Villar said in an interview on the sidelines of the Forbes Global CEO Conference in Manila last week. "We are looking into that."

A similar move in 2013 by Philippine billionaire Henry Sy, the nation’s richest man, catapulted his SM Prime Holdings, Inc. from the country’s biggest shopping mall operator into the biggest developer by market value, unseating Ayala Land, Inc. The merger allowed SM Prime to undertake projects other than shopping centers and develop what it calls "micro cities" around its malls.


Vista Land, which sells homes priced as low as P500,000 ($10,900), has a market value of P45.3 billion, while Starmalls, which has nine shopping centers, is worth P68.8 billion.

Mr. Villar’s plan "allows immediate diversification," said Robert Ramos, Manila-based chief investment officer at Union Bank of the Philippines.

"While the housing market is expected to continue growing, there is also a preference for developers with a steady income from leasing and rent."

Vista Land, which has a presence in 92 towns and cities in 35 provinces, has identified 23 residential projects that can be developed into what Mr. Villar calls "communicities" by adding shopping malls, grocers, department stores, schools, hotels and hospitals. In areas where there’s demand, offices will be built for outsourcing companies, he said.

Vista Land will develop these communities, while Starmalls provides the large-box shopping centers and offices, Mr. Villar said. Vista Land has also built shopping arcades in some of its projects.

"What do homeowners need? You need to shop. You need to watch movies," Mr. Villar said. "We want to provide all of that." -- Bloomberg